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of <h1>Tax Exemption for Capital Asset Transfers Between Indian Companies Withdrawn if Control Changes Within 8 Years.</h1> Section 47(iv) and 47(v) of the Income Tax Act state that the transfer of a capital asset between a holding company and its 100% subsidiary, or vice versa, is not considered a taxable transfer if both companies are Indian. The cost and period of holding (POH) are based on the previous owner. However, under Section 47A, if within eight years the asset is converted to stock-in-trade or the holding company loses full control of the subsidiary, the exemption is withdrawn, and tax is levied on the transferor. If Section 47A applies, the cost of acquisition for the transferee is the purchase price.
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